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Kanowitz v. Broadridge Financial Solutions, Inc.

United States District Court, E.D. New York

March 31, 2014

MICHAEL KANOWITZ, STEVEN ROY, HELENE CRANMER, CHARLES HYDO, and DANIEL STURCHIO, on behalf of themselves and all others similarly-situated, Plaintiffs,
v.
BROADRIDGE FINANCIAL SOLUTIONS, INC. Defendant.

MEMORANDUM AND ORDER

A. KATHLEEN TOMLINSON, Magistrate Judge.

I. PRELIMINARY STATEMENT

This is a class action lawsuit alleging claims of (1) unpaid wages in violation of Article 6 of the New York Labor Law, §§ 190 et seq., (2) breach of contract, and (3) other claims that "can be inferred from the facts" against Defendant Broadridge Financial Solutions, Inc. ("Defendant" or "Broadridge"). See Complaint ("Compl.") [DE 1]. This action is brought by Plaintiffs Michael Kanowitz, Steven Roy, Helene Cranmer, Charles Hydo and Daniel Sturchio (collectively, "Plaintiffs") on behalf of themselves and all similarly-situated employees. Id. The Plaintiffs alleges that Broadridge failed to pay them non-discretionary wages despite their satisfaction of objective criteria set forth in Defendant's Fiscal Year 2009 Management by Objectives (MBO) Bonus Plan Document. Id. ¶ 1.

Before the Court is Defendant's motion for a full stay of discovery pending the disposition of its anticipated motion to dismiss the Complaint for lack of subject matter jurisdiction under the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d)(4)(B). See Defendant's Motion to Stay Discovery ("Def.'s Mot.") [DE 14]. Defendant argues that this Court lacks jurisdiction in light of the "home state" and "local controversy" exceptions set forth in CAFA, "which are triggered when two-thirds of the putative plaintiff class and the defendant is a citizen of the state in which the action was filed." Id. at 1. As, such, Broadridge submits that there is "no basis for jurisdictional or any other discovery." Id. In opposition, Plaintiffs contend that Defendant has not provided sufficient evidence that CAFA applies and that limited discovery is warranted to determine whether two-thirds of the putative plaintiff class and the defendant are indeed citizens of New York State. See Plaintiffs' Opposition to the Motion to Stay Discovery ("Pls.' Opp.") [DE 15]. For the reasons set forth below, Defendant's motion to stay discovery is GRANTED, in part, and DENIED, in part.

II. BACKGROUND

A. The Complaint

In Fiscal Year 2009, a period which began on July 1, 2008 and ended on June 30, 2009, Broadridge implemented and published a bonus payment plan entitled the "FY '09 Management by Objectives (MBO) Bonus Plan Document." Compl. ¶ 1. According to the Complaint, the MBO Bonus Plan Document contained both discretionary and objective bonus provisions. Id. The discretionary portion of the Bonus Plan "carried a 10% weight." Id. The objective section, by contrast, constituted 90% of the weight of the plan. Id. At the beginning of Fiscal Year 2009, the named Plaintiffs and the Class Action Plaintiffs were provided with the Bonus Plan Document which outlined the criteria under the plan. Id. Although the named Plaintiffs and the Class Action Plaintiffs satisfied the objective criteria, Defendant either "slashed" or refused to pay Plaintiffs the amount that they had earned. Id. Plaintiffs argue that "[t]hese totals are due and owing to Plaintiffs and Class Action Plaintiffs as unpaid wages." Id. In the alternative, Plaintiffs maintain that "Defendant's failure to pay this money to Plaintiffs and Class Plaintiffs is a breach of contract entitling Plaintiffs and Class Plaintiffs to damages." Id.

Relevant to the motion before the Court is Plaintiffs' allegation in the Complaint that the basis for subject matter jurisdiction is 28 U.S.C. § 1332(d). Compl. ¶ 2. Plaintiffs claim that the "amount in controversy exceeds the sum or value of $5, 000, 000 and at least one member of the class of plaintiffs is a citizen of a different state than Defendant Broadridge." Id. The Complaint alleges that all five individually-named Plaintiffs are citizens of the State of New York and were employed by Broadridge during Fiscal Year 2009. Id. ¶ 4. Broadridge is alleged to be "a corporation organized and existing under the laws of Delaware" and "according to the New York State Department of State, " maintains a "principal executive office" at 2 Journal Square, Jersey City, New Jersey 07306." Id. ¶ 5.

Plaintiffs seek class certification under Rule 23(a) and 23(b)(3). See Compl. ¶¶ 7-8. Specifically, Plaintiffs seek to certify the following class:

Current and former employees of Defendant who worked for Defendant during the Defendant's 2009 fiscal year, i.e. from July 1, 2008 through June 30, 2009, and who were eligible to receive a bonus under the Defendant's MBO Bonus Plan applicable to the 2009 fiscal year.

Id. ¶ 9. The Plaintiffs contend that the proposed class will satisfy the requirements of both Rule 23(a) and 23(b)(3). Id. ¶¶ 10-20. Plaintiffs further note that "[t]here are over 100 known employees of the Defendant who fit the class definition outlined above; many hundreds more may exist." Id. ¶ 10.

On or about September 1, 2008, Broadridge published the Fiscal Year 2009 MBO Bonus Plan Document. Compl. ¶ 27. The cover page of the document specifically stated that the plan was "retroactive to or effective' as of July 1, 2008." Id. All named Plaintiffs were employed at Broadridge during the entirety of Fiscal Year 2009 according to the Complaint. Id. ¶¶ 21-26. The purpose of the MBO Bonus Plan was to "[p]rovide designated associates with individual goals that are aligned with [Broadridge's] business goals and to reward associates when the organization achieves its goals." Id. ¶ 28 (internal quotations omitted). The MBO Bonus Plan was calculated on the basis of four components: (1) financial results, (2) client satisfaction, (3) projects/initiatives, and (4) leadership. Id. ¶ 30. The MBO Bonus Plan Document explained how to calculate the different components. Id. ¶ 31. The Plaintiffs allege that the leadership component was the only discretionary section and that it carried a 10% weight. Id. "Thus, based on this language and simple logic, " Plaintiffs conclude, "all other components of the MBO Bonus Plan, comprising the other 90% of the calculation, were to be calculated on a nondiscretionary basis." Id. Supervisors employed by Broadridge "explained to Plaintiffs and Class Action Plaintiffs exactly what they had to do to earn 90% of their objectively-calculated bonuses for that year." Id. ¶ 33.

At the end of Fiscal Year 2009, supervisors submitted the calculations for approval. Compl. ¶ 34. Plaintiffs claim that [u]pon such submission, even though the eligible employees had spent the previous year working towards and striving to meet such objectively-set criteria, the Defendant's upper-level supervisors determined that none of the employees' bonuses could exceed a certain percentage even if those employees had earned a higher percentage in accordance with the objectively-based formula as set [forth]...in the 2009 MBO Bonus Plan Document." Id. ¶ 35. Consequently, Plaintiffs contend, "Broadridge recalculated and slashed the bonuses of its Plan-eligible employees, including the five named Plaintiffs and the Class Action Plaintiffs, who had earned a higher bonus amount under Broadridge's announced and predetermined objective formula." Id. ¶ 36. Thereafter, "Broadridge paid to Plaintiffs and Class Action Plaintiffs such lower amounts and not the amounts that Plaintiffs and Class Action Plaintiffs had objectively earned over the course of the 2009 fiscal year." Id.

In Count I of the Complaint, Plaintiffs assert a cause of action for unlawfully withheld wages under New York Labor Law §§ 190, et seq. Compl. ¶¶ 39-42. In Count II, Plaintiffs allege a cause of action for breach of contract under New York state common law. Id. ¶¶ 45-50.

B. Procedural History

1. Defendant's Pre-Motion Conference Letter

On April 10, 2013, Defendant filed a letter to Judge Hurley requesting a pre-motion conference for purposes of moving to dismiss the Complaint, pursuant to FED. R. CIV. P. 12(b)(1), for lack of subject matter jurisdiction. DE 10. Defendant argued that the Court is deprived of subject-matter jurisdiction in light of the "home state" and "local controversy" exceptions to CAFA since more than two-thirds of the putative class and Broadridge are citizens of the same state - New York. Id. at 1-2. In their April 3, 2013 responding letter to Judge Hurley, Plaintiffs consent to a pre-motion conference but argue that factual issues exist with respect to the citizenship of Broadridge and the putative Class Plaintiffs. DE 12 at 2. As such, "Plaintiffs...request discovery into the factual contentions of citizenship that the Defendant raises in its letter." Id. at 3. However, Plaintiffs take no position with respect to merits-based discovery. Id.

2. The Initial Conference

On April 11, 2013, the parties appeared before this Court for an Initial Conference. DE 13. The Court acknowledged that "Defendant is seeking to stay all discovery pending the submission and determination of its intended motion to dismiss." Id. Plaintiffs' counsel asserted that they seek discovery to proceed, "at least with regard to permitting discovery on the issue of subject matter jurisdiction." Id. In light of the request to stay discovery and the anticipated motion before Judge Hurley, the Court stated that:

After hearing from both sides today, I advised counsel that I believe it is appropriate for this Court to take a further look, in a more formal way, at the arguments and cases cited by defendant's counsel this morning, in addition to giving plaintiffs' counsel an opportunity to argue why limited discovery should not proceed, notwithstanding defendant's legal arguments. Although the Court realizes that there is some overlap between the merits of this action and a request for a complete stay, I have asked counsel to focus on the "stay" argument as much as possible. Defendant's counsel will file a letter motion, not to exceed three pages, on ECF by April 22, 2013 seeking a full stay of discovery pending the anticipated motion to dismiss. Plaintiffs' ...

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